"BIBA is liaising closely with the Association of British Insurers and the Housing Safety Minister’s Office to examine solutions for the provision of more affordable property insurance."
- Graeme Trudgill, executive director of the British Insurance Brokers’ Association
In 2017, 72 people were killed in the Grenfell Tower tragedy in west London. This disaster triggered a national outcry over the safety of high-risk residential properties, particularly those with flammable cladding. Residents have since reported they are unable to secure mortgages or affordable insurance due to these structural risks, making their homes unsellable.
FCA is now expected to push insurance companies and brokers to lower the cost for leaseholders as part of a report due by the end of this month.
In January 2022, the government asked the FCA to investigate why the cost of insurance had drastically increased. Several premiums had risen by over 100% a year, leaving leaseholders with “crippling costs,” said Michael Gove (previous levelling-up secretary) at the time.
According to Bloomberg, the FCA plans to criticise price hikes and the sometimes “cozy relationships” between insurers and brokers alongside the possible imposition of caps on commissions that insurers pay brokers to re-direct large contracts.
This report may also tie in with the government’s push to give more power to leaseholders, who buy their residence but not the ground on which it sits since the government’s ban of ‘ground rents’ on new properties.
Graeme Trudgill, executive director of the British Insurance Brokers’ Association has said:
“[The sector is] very sensitive to the fact that in some cases premiums have increased significantly at a time when leaseholders are also being asked to contribute towards remediation costs and other costs such as waking watches.
“BIBA is liaising closely with the Association of British Insurers and the Housing Safety Minister’s Office to examine solutions for the provision of more affordable property insurance premiums for high-rise residential buildings that require fire-safety remediation work.”